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Precept 11: Roles of international companies

Companies should commit to the highest environmental, social and human rights standards and contribute to sustainable development.

Private sector companies in extractive industry projects should take steps that go beyond minimum legal requirements to respect the highest environmental, social and human rights standards; avoid corruption; contribute to sustainable development outcomes; and make public and accessible the relevant project information.

Companies should commit to preventing, reducing and remediating any potential negative environmental, social or human rights impacts of their activities; and they should be accountable to the host government for these commitments. They should also require their partners, contractors and subcontractors make similar commitments. These include the assessment and management of potential local and regional impacts of the project, including impacts uniquely experienced by people of various races, ethnicities, genders, ages or other such traits. Both governments and companies should fully account for the rights of indigenous peoples in particular. Where free, prior and informed consent to extraction is required by law, companies must obtain consent ahead of any work taking place on indigenous lands, and should furthermore meaningfully engage and consult with local communities that may be significantly affected by extractive operations. Companies should ensure that funds are available for these commitments throughout the life cycle of the project, planning ahead for periods of low or no revenue, such as a when the extraction project closes.

Abstain from corrupt practices

Multinational companies should act in accordance with national law, and international agreements and norms, which increasingly recognize bribery of government officials as a crime. Companies should have clear internal policies relating to corruption, including procedures and controls that prevent and punish corrupt practices by employees, contractors, subcontractors or their agents.

Contribute to sustainable development outcomes

Companies should support the host state’s efforts to maximize potential benefits arising from extractive activities. For example, if local content development is appropriate in the country, governments may work with companies to provide the long-term commitments necessary to spur investment in local industry. Company cooperation may also come in the form of training and employment initiatives to improve the quality of local suppliers. Such partnerships are vital for reducing discord and strengthening capacity.

Where companies provide ancillary goods or services such as rail or road infrastructure, which are not directly related to the extractive activity or to mitigating its impacts, they should do so in a manner consistent with the operating standards of the extractive project and ensure the maintenance or responsible handover of such goods and services beyond the life cycle of the project.

With respect to contractual stability, government assurances to companies should be limited to non-discriminatory treatment clauses. Companies should not ask for, expect, or accept provisions for exemptions or compensation for changes in the statutory or regulatory framework related to human rights, environmental controls, health and safety, and labor.

Provide relevant project information

Companies should support and comply with public disclosure requirements. These include the contracts between government and companies, which should clearly state the financial terms in an easily understandable manner. The only justifiable exception for time-bound confidentiality relates to businesses’ proprietary information, which could directly affect the position of one of the parties in a concurrent or imminent negotiation. Companies should make readily available any reports regarding potential impacts on people, their internationally protected human rights, or the environment, including relevant assessment data, and prevention, mitigation and remediation plans. Governments and companies should work together to ensure that information is available in a timely, accessible and usable manner.

For more information about implementing the principles of the Natural Resource Charter precepts, click here.

Tax regimes and contractual terms should enable the government to realize the full value of its resources consistent with attracting necessary investment, and should be robust to changing circumstances.